First time buyer mortgage applications increase

07 August 2009 / by Andy Davies

First time buyer mortgage applications increased in July as house prices stabilised, according to Mortgageforce.

The mortgage brokers revealed that first time buyers made up 20 per cent of mortgage applications for July, which is a nine per cent increase on June.

In addition, mortgage for purchase applications almost doubled in July to 41 per cent from 23 per cent in June.

Katie Tucker, technical manager for Mortgageforce attributes this rise to Halifax and Nationwide's house price figures reinforcing the confidence in the housing market.

Halifax announced house prices increased by just over 1 per cent in July meaning the average home now costs £159,623, while Nationwide said house prices increased for the third month running in July.

Commenting on the news, Ms Tucker said: "Stable house prices and the availability of higher loan to value mortgages support each other more than you might think: we all know that more 90% mortgages means more buyers can get on the ladder, but it works both ways, property values stabilising means lenders can offer higher loan-to-values without as much risk, so without needing as much deposit."

Ms Tucker expects to see more 85 to 95 per cent deals available soon, she added: "Half of purchase transactions were on 85% and 90% loan to value deals, which is high against trend and undoubtedly a result of pent up demand."
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